New York caught with 'beacons' in pay phone kiosks: What did they do?

New York has told a company to remove beacons from advertising panels in pay phone kiosks that could track smart phone users and push advertising to them. But more broadly, the technology is spreading.

A tourist uses his iPhone to photograph Federal Hall in New York's Financial District in this 2012 file photo. Some pay phone kiosks in New York had technology embedded in ad panels that was capable of tracking passing smart phone users.

New York City ordered an advertising firm to remove hundreds of tracking devices it had installed in public phone kiosks Monday after it was revealed the firm had equipped them with hidden dime-sized transmitters called “beacons.” Such beacons are commonly used to “push” ads to nearby smart phone users, but they can also be used to track movements and gather user information.

The advertising company, Titan, a multimedia firm that says it specializes in “people in transit” and controls the ad panels for over 5,000 hardwired phone cubbies throughout New York City, began a test program to install the transmitters in selected stations in Manhattan, according to a report by BuzzFeed.

While New York City phone booths may be anachronisms in the digital age of ubiquitous smartphones, the open-air, hard-wired “booths” are still valuable as advertising posts – even though many of the old-fashioned pin-hole-dotted handsets just dangle on their silver heavy duty wires and are often out of order.

The city’s Department of Information Technology and Telecommunications had approved Titan’s plans to install the beacons in 2013, but without public notice or consultation. After the BuzzFeed report on Monday, however, the city announced it would ask the company to begin removing them.

“While the beacons Titan installed in some of its phones for testing purposes are incapable of receiving or collecting any personally identifiable information, we have asked Titan to remove them from their phones,” Mayor Bill de Blasio said in a statement. “The beacons will be removed over the coming days.”

The company said the beacons installed in Manhattan were going to be used for maintenance and "inventory management" purposes only, but beacon technology is becoming more and more a part of retail advertising and consumer convenience programs. Stores and sports stadiums use them to send messages to nearby users.

The technology requires users to have Bluetooth technology on their phones turned on, and also to have a third-party app that works with the beacon installed.

A user with an app from the video game retailer GameStop, for example, could be tracked by a store’s beacons and then sent a push notification of a special deal. Or a sports stadium beacon could track a user’s location to push gate information or other advertising messages, experts say.

But as the Buzzfeed report notes, “the spread of beacon technology to public spaces could turn any city into a giant matrix of hidden commercialization – and vastly deepen the network of surveillance that has already grown out of technologies ranging from security cameras to cell phone towers.”

Even though a user must “opt in” by downloading a third-party app, beacon companies can still develop a much deeper profile of the user’s mobile usage and behavior by automatically accessing other information stored on the user’s phone. This includes demographic data, personal interests, and “personal places of interest” stored in GPS location information on your phone – all of which are coveted by companies seeking to send personalized, relevant ads to a user.

Titan said none of their current beacons were being used to collect data or trigger advertising, but “there are potential advertising-use cases, for sure,” a spokesman told The New York Daily News.

The fact that the city never informed the public about the beacons troubled many civil libertarians.

“To the extent that the city is involved in this, the lack of transparency about this data-mining operation is even more, of even greater, concern,” said Donna Lieberman, executive director of the New York Civil Liberties Union, to the Daily News. “This is an agreement that has to be suspended pending an open process about what’s going on.”